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Economy - Economics USA

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Business Week

Private non-farm employers cut 298,000 jobs in August, according to estimates by payroll company ADP, a figure that disappointed analysts’ expectations but still showed a gradual easing of job losses. Businesses with fewer than 50 employees lost 122,000 jobs in August, the smallest decline since September 2008, according to the report. Mid-size businesses (with between 50 and 500 employees) lost 116,000 jobs, and large companies lost 60,000. While that sounds like small businesses bear the brunt of job losses, it’s less severe when you consider that they account for a larger share of employment, says Joel Prakken, chairman of Macroeconomic Advisers, which developed the report. Monthly job losses will continue to diminish for several months before employment hits bottom around the end of this year, Prakken says. He expects positive employment growth in 2010. The total 298,000 jobs lost was more severe than analysts’ expectations of around 250,000 but not so far off that it’s stati

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The Market Ticker

VIDEO... Do those three things and even in severe recessions you don't have a major problem with defaults. You also don't get speculative property bubbles because as soon as prices try to rise above affordable maximums for the income in a given area the supply of buyers who can meet the ratios disappear. Enact this into the law with a provision that any loan found to be funded outside of these ratios is deemed predatory and subject to rescission and the problem is solved. Anything else is subject to being gamed and is simply an attempt to steal - again - from the taxpayers. These lobbying and "trade" organizations need to be recognized as what they are - a blatant device to game regulatory processes for the purpose of foisting off risk to the taxpayer while pocketing as much money as is possible for private interests. STOP THE LOOTING.

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Zero Hedge

This is what happens when you live in a bankrupt state: one by one the big exchanges stop trading with you. Please be advised that there has been an unforeseen delay in renewing CDCC’s annual application with the State of California. Due to this delay, CDCC options may not at this time and until further notice be sold or offered for sale in the state of California and to California residents until the annual application process is completed. How does one now buy December $0 Puts on Sacramento? Perhaps Arnie can do another garage sale and pay up before the NYSE and NASDAQ follow suit and block all equity trading for Californians.

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Market Watch

The stock market is about to encounter its two worst months of the year. Fall is the time of year when the bears go for their annual romp down Wall Street. As the days grow shorter, stocks tend to decline in September and October far more often than they rise. Indeed, these two months are the only ones of the year where the average change in the Dow Jones Industrial Average has been negative. They have also contained many of the major crashes. There are several reasons why stocks usually stumble at this time. One could be that by September, many firms can no longer deny that their earnings forecasts for the year have been too optimistic. You can imagine how this goes down with investors. Another reason might be what amounts to a self-fulfilling prophecy. Because so many crashes have occurred in September and October, then these are the months when one should be out of the market -- kind of like whistling past the graveyard. The annual reminders by the media and the pu

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Market Watch

Keep in mind WE own AIG because of the bailouts so now this signals what that investors are even worried hmmm. The story BOSTON (MarketWatch) -- The U.S. financial sector was sharply lower on the first day of September as investors nervous about the summer run-up and the new month's bearish reputation fueled the selling momentum. Shares of bailed-out insurance giant American International Group Inc. (AIG 37.52, -7.81, -17.23%) took a major hit for the second straight session after their recent surge. AIG more than tripled in August as traders bid up other so-called high-beta financial stocks such as Citigroup Inc. (C 4.66, -0.34, -6.84%) , Bank of America Corp. (BAC 16.87, -0.72, -4.09%) , Fannie Mae (FNM 1.69, -0.24, -12.47%) and Freddie Mac (FRE 2.01, -0.28, -12.23%) . Markets are concerned about a potential pullback in highflying bank stocks in September after the summer rally. An exchange-traded fund tracking the financial stocks in the S&P 500 Index (SPX 1,002

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The Market Ticker

The Journal calls this "relaxed accounting standards." That's a polite way of saying that the government has made legal accounting fraud and willful disregard of the impairments that are embedded in these loans - impairments that with any proper regulatory system would have been forced to be recognized as they occurred. Still, most of the $6.7 trillion in commercial real estate is privately owned. Also, it is unlikely commercial real estate will benefit much from an early stage of an economic recovery. What landlords need is occupancy and rents to rise, and that means employers have to start hiring and consumers need to shop more. So far, there are few signs this is happening. Got it? $7 trillion of exposure that had its "value" set during the era of fraudulent lending and accounting, where rents and occupancies rise to the sky, growing literally all the way to the sun. Such magical thinking - the belief that compound (exponential) earnings growth can b

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Summer is over. It’s back to work…12 hours a day…just like we’ve worked for the past 39 years.   When we were in college we had no money. In the summer we had to work two jobs to try to save enough cash to continue. One summer, we worked in a boatyard in Annapolis early in the morning…then, we did an evening shift painting television towers. Painting the towers was such dangerous work our poor mother begged us to quit. But the money was good – $5.25 an hour – so we had to keep at it. More about that in a minute… 

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WSJ

Federal Reserve and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat. Their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds. The CMBS sector is suffering two kinds of pain, which, according to credit rater Realpoint LLC, sent its delinquency rate to 3.14% in July, more than six times the level a year earlier. One is simply the result of bad underwriting. In the era of looser credit, The commercial-real-estate market could yet be salvaged by an improving economy and bailout programs coming out of Washington. In addition, capital markets are starting to ease for publicly traded real-estate investment trusts. Since March, more than two dozen REITs have managed to raise more than $13 billion by selling shares. Still, most of the $6.7 trillion in commercial

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Russia Today

Professor Igor Panarin, whose book “The Crash of America” is just out, claims that by November the book will be yesterday’s news. Panarin believes President Obama will lead his country to a breakup. Panarin compares Obama to former Soviet president Mikhail Gorbachev. “Obama is “the president of hope”, but in a year there won’t be any hope. He’s practically another Gorbachev – he likes to talk but hasn’t really managed to do anything. Gorbachev at least had been a secretary of a regional communist party administration, whereas Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash. When Americans understand that – it will be like a bomb explosion,” Panarin said, speaking to journalists during the unveiling of his book. Panarin made his controversial forecast back in 1998, saying 2010 would be the starting point of the collapse. He spent the following eleven years monitori

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Michigan Messenger

While the state of Michigan has the highest unemployment rate of any state in the nation, the city of Detroit leads the way for cities. For the month of July, the unemployment rate in Detroit stood at a staggering 28.9% — and that’s probably undercounted in the same way all unemployment figures are due to the way such rates are measured. Still, it’s the highest rate on record for Detroit.

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TrimTabs Investment Research

TRimTabs Investment Research reported that selling by corporate insiders in August has surged to $6.1 billion, the highest amount since May 2008. The ratio of insider selling to insider buying hit 30.6, the highest level since TrimTabs began tracking the data in 2004. "The best-informed market participants are sending a clear signal that the party on Wall Street is going to end soon," said Charles Biderman, CEO of TrimTabs. TrimTabs' data on insider transactions is based on daily filings of Form 4, which corporate officers, directors, and major holders are required to file with the Securities and Exchange Commission. In a research note, TrimTabs explained that insider activity is not the only sign the rally is about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment indicators, has turned very bearish for the first time since March.

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American Policy Center

Sustainable Development calls for changing the very infrastructure of the nation, away from private ownership and control of property to nothing short of central planning of the entire economy – often referred to as top-down control. Truly, Sustainable Development is designed to change our way of life.

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The Examiner

Obama and his minions would love for us to believe that 'recovery is just around the corner,' and 'we are on the brink of a rebound,' and other such nonsense. Indeed, the stock market seems to back them up. However, the stock market was up significantly in the months leading up to the big crash of 1929. This is no indication that a train-wreck isn't about to occur. Troubling storm clouds are gathering in several sectors of the economy. First, the ever-growing load of debt the country is carrying will prevent any significant recovery. The debt is simply too high, too staggering, too mind-boggling. In other words we are headed for a financial meltdown of historic proportions while the country is being governed by inept, sophomoric lamebrains who have their heads stuck so far into the sand they can practically see China. We still have time to thwart the crisis provided action is taken immediately. Here is a final warning from GATA: Yet the Last Contango

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Ty Andros

Many analysts are calling an end to the recession.  No way, we are only in a countertrend bounce in economic activity before the next leg DOWN.  One has to look no further than the incredible bounces of 50% or more in markets halfway to the lows from 1929 to 1933, or in post-bubble Japan since 1989 to see the parallels.  The social welfare states of the G7 and their spawn known as FIAT currency and credit financial systems have just masked the unfolding death of their economies.  As public serpents, er…servants implement their plans for MISERY SPREAD WIDELY, also known as SOCIALISM, which forces more and more desperate voters into their grasp.

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The Business Insider

Paul Krugman is trying to have it both ways when it comes to the deficit. On the one hand, he says it isn't a big problem, and that we can afford a lot more spending. On the other hand, he says if there is a problem it's all Bush's fault -- which may be true, but that doesn't change the current reality. Either way, some are finding his reasoning to be lacking. James Hamilton at Econbrowser points to Political Math, which debunks the claim that the $9 trillion debt is okay because it's on par with where we were post WWII. ...implicit in his observation is the concept that since we did fine after WWII, we'll do fine now. But the years after WWII saw drastic reductions in the inflation-adjusted debt driven by drastic reductions in spending. Mr. Krugman points to no similar possibility in the post-Obama world.... Back in 1945, at the height of the spending that saw our national debt rise so dramatically, entitlement spending and interest on the national debt m

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AP

Investors are still trading common shares of Fannie Mae, Freddie Mac and American International Group Inc. by the billions, even though analysts say their prices are almost certain to go to zero.

All three are majority-owned by the government and are losing huge sums of money. The Securities and Exchange Commission and other regulators lack authority to end trading of stocks in such “zombie” companies that technically are alive - until the government takes them off life support.

 

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Throughout the financial crisis, huge sums of money have been spent, handed out and lost. With talk of billions upon billions being passed around, it’s easy to lose perspective on how much $1 trillion or even $1 billion really is.  With official measurements of American currency from the US Bureau of Printing and Engraving and the US Mint, here’s some perspective on what these huge sums of money would actually look like and how they would compare to every day objects.

What would the money allocated to the TARP actually look like? How high would the AIG bonuses pile up if the bills were stacked one on top of another? How big, literally, is the National Debt?

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Zero Hedge

And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented. As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo. In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity. The Clearing House submits this declaration because the Court's Order threatens to impair the

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Ayn Rand wrote, "when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."

America is not doomed, but the fellows in Washington are pushing for that outcome. It seems that all the characters that encouraged this financial crisis are being rewarded, and Ben Bernanke's re-nomination is no exception to this rule. He was on the Board of Governors when Alan Greenspan grew our bubble economy. Known as 'Helicopter Ben,' Bernanke was the most vocal supporter of low interest rates to combat the bogus threat of deflation, even if it meant dropping cash from helicopters. He succeeded in his aim – as it is hard for prices to decline while the money supply is growing by double digits.

Of course, much of that new money went into speculative bubbles, first in tech and then real estate. When the misallocation became too great to ignore, the credit markets froze and leveraged instit

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Source: Corbett Report.  In an interview released today by Digg and the Wall Street Journal, Treasury Secretary Timothy Geithner was pressured about the growing popular movement to Audit the Fed spearheaded by Texas Congressman Ron Paul. A visibly uncomfortable Geithner attempts to dismiss the question by stating "I'm sure people understand that you want to keep politics out of monetary policy." When Geithner is again pressed on the issue, he makes the stunning assertion that conducting an audit of the Federal Reserve—something never before done in its 96 year history—is a "line that we don't want to cross," proclaiming that such a move would be "problematic for the country."

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Reuters

Problem U.S. banks and thrifts on an official watchlist rose more than a third to 416 in the second quarter of 2009, as bad loans continued to bite, but regulators saw signs of stabilization in the industry. The Federal Deposit Insurance Corp said the industry swung back to a $3.7 billion loss in the second quarter, after reporting a

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Nathan**Q**s Economic Edge

Are you tempted? The Temptations – Get Ready: Remember me? Wall Street repackages toxic debt. Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It's a lot like what got banks in trouble in the first place. In recent months investment banks have been repackaging old mortgage securities and offering to sell them as new products, a plan that's nearly identical to the complicated investment packages at the heart of the market's collapse. "There is a little bit of deja vu in this," said Arizona State University economics professor Herbert Kaufman.

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WSJ

The FDIC's insurance fund, which guards $6.2 trillion in U.S. deposits, fell to $10.4 billion at the quarter's end, the lowest since mid-1993.. Data released Thursday painted a gloomy picture of the state of banking. The government fund that protects consumer deposits fell to its lowest level since 1993. The continuing woes, which come despite trillions of dollars in government rescue financing and a rebounding stock market, raised questions about how quickly the economy can revive. The Federal Deposit Insurance Corp. said it had 416 banks on its "problem list" at the end of June, equivalent to about 5% of the nation's banks, up from 305 at the end of March and 117 at the end of June 2008. Problem banks had a combined $299.8 billion of assets at the end of June, compared with $78.3 billion a year ago. Landing on the FDIC's problem list means a bank is at a high risk of insolvency. State and federal regulators have already shut 81 banks this year.

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Financial Times

Comment mine - it sure does they privatized the profits and then socialized the losses! In the build-up to the global crisis of 2008, tiny Iceland was a canary in the mine, a leading indicator of wider vulnerabilities. Now, amid growing optimism about global recovery, Iceland may again be a leading indicator of trouble ahead. In the space of a few days last October Iceland’s whole banking system collapsed and was taken into public ownership, including the three banks which went from nowhere in 2002 to rank among the world’s 300 biggest by 2007. These three now make it into a less glorious league – Moody’s list of the 11 biggest financial bankruptcies in history. The country’s average income fell from 160 per cent of the US’s in 2007 to 80 per cent this year. First, the freeze on mortgage repayments is due to end in November. The fifth of mortgages that are in yen or Swiss francs face a doubling of payments. Krona mortgages also face big increases in payments because they are t

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American Thinker

Back in 2003, when a Barack Obama presidency was little more than a gleam in George Soros's eye, Jim Powell published a book which was disturbingly prescient. Titled FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression, it outlined how Franklin Roosevelt's big spending policies hindered, rather than helped, the United States in recovering from the Great Depression. Obama apparently was too busy in 2003 -- maybe listening to his spiritual advisor Jermemiah Wright ranting "God damn America," or helping his good friend and mentor Tony Rezko raise money for Obama's U.S. Senate campaign, or voting 'present' in the Illinois state senate -- to read Powell's book, because he has embarked on a path to replicate FDR's failures. Obama's reckless spending has already sent the federal deficit mushrooming, like some economic radioactive cloud, in just his first year, and evidence mounts that Obama's economic policies are

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Reuters

The Obama administration’s plan for reining in derivatives leaves unchecked one of Wall Street’s dirty little secrets: the ability of a derivatives dealer to redeploy cash collateral that gets posted by one of its trading partners.

On Wall Street, this practice of taking collateral and reusing it is called rehypothecation. In essence, it’s a form of free money for derivatives dealers to use as they please — even to repost it as collateral to finance their parent company’s own borrowings.

 

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